Tuesday, March 01, 2005

Dallas Sports Media Market

7. Dallas- Ft Worth

2.3 million Television Households

While there is currently only one major Regional Sports Network in Texas, FSN Southwest, there have been two seperate occassions in the past decade when it appears that local team owners would take matters into their own hands.

The Rangers shocked the world in 2000 when they announced their $252 million, 10 year deal with A-Rod. While announcing this landmark deal, Rangers owner Tom Hicks publicly thanked Fox Sports Net for providing him with the funding to get the deal done.

That funding came in the form of a $550 million deal between Fox and Hicks for the rights to essentially all of the Rangers and Stars games for 15 years. You see, Tom Hicks could probably be classified as one of the world's savvyest negotiators. After all, he negotiates major deals for a living in his "real" job as partner of buyout firm Hicks, Muse, & Tate. He knew that by owning an MLB team and a winter sports team in the same market, he had a very credible threat to start his own regional sports network and basically run FSN out of town. So he used this position of leverage to strike a deal so rich that Fox is still scratching its head in disbelief. Part of the reason Fox was able to get the deal was because the rights costs were to be shared between Fox Sports Net and Fox's local O&O broadcast station, KDFW. But since cable is where the bigger money is due to affiliate fees, the broadcast portion of this deal is under water.

Hicks has been threatening for several years to sell the Stars and his 50% stake in American Airlines Arena, though recently he said he would simply hang on to the teams until the value improves.

The Rangers and Astros basically share the entire footprint of FSN Southwest, with the exception of the Dallas and Houston inner markets.

Comcast is the major MSO in northern Texas and Oklahoma. It will be interesting to see what becomes of FSN Southwest the next time the Hicks rights come up for bid in 2015. In the meantime, the Dallas Mavericks deal with FSN Southwest will come up in 2008.

Kaiser Prediction: Comcast will strike a deal with Cuban for rights to all of the Mavericks games in order to create a new RSN in Dallas. Mavericks owner Mark Cuban is savvy enough to make an equity ownership stake in a new network a requirement for such a deal.

The second time the region was nearly split apart was the recent push by the Astros and Rockets to form their own RSN. I will get to this later when I address the Houston DMA.

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